Health and social care cuts deferred for Fife despite £7.7m budget gap forecast

A budget gap is projected in the coming years.

The region’s health and social care integrated joint board (IJB) has decided to set a one-year budget for 2022/23, although members were urged to maintain a three-year focus recognising the significant financial challenges that lie ahead.

While a balanced budget is expected to be reached for the coming financial year, estimates suggest the core budget gap could rise to as much as £7.7m by 2024/25 due to ongoing cost pressures such as pay uplifts, drug cost inflation and the payment of £10.50 as part of the Living Wage commitment for commissioned services for adult social care.

Audrey Valente, chief finance officer, confirmed that savings opportunities – the details of which have not yet been divulged – had been identified for 2023/24 and 2024/25 within the IJB’s medium-term financial strategy, but a decision on those has been put on hold for the time being.

“As the strategic plan will be refreshed during next financial year, it is proposed that there is a need to align the production of our critical strategic documents to evidence the golden thread within our planning processes and to ensure that there are no unintended consequences of disparate decision making,” she explained.

“This will ensure that our outcomes can be evidenced across all key pieces of work.”

Members heard how significant additional expenditure has been incurred as a direct result of the COVID-19 pandemic in the past year, and how staff had worked hard to mitigate the impact of those.

The final cost to the IJB in relation to COVID spending is estimated to be around £32m for 2021/22, although that was fully-funded by the Scottish Government.

Ms Valente said costs associated with the pandemic are expected to continue well into 2022/23, adding: “It is unknown how these costs will impact on the budget although high level estimates have been reflected in the budget model.

“There may be significant implications.”

Moving forward, Ms Valente highlighted the need to commission work to understand what the impact of demographics will be on future health and social care budgets.